The government has a range of responsibilities covering the shipping industry, including:
- developing policy where safety and security are paramount, as well as balancing environmental considerations and commercial interests
- encouraging shipping companies to register their ships in the UK
- implementing and influencing European Union legislation
- supplying efficient and modern marine aids to navigation
UK shipping
The number of vessels registered in the UK has been increasing for a number of reasons. Probably the main factor has been the tonnage tax introduced in 2000. This is an alternative method of calculating corporation tax using the net tonnage of the ship operated. It is linked to an obligation on shipping companies to provide training or to provide payments in lieu.
The government is committed to the Quality Shipping initiative which commits us to strive for high quality, good public reputation and predictable performance for all UK-registered ships.
Tonnage tax
Tonnage tax applies normal corporation tax to notional profits determined by the tonnage of the ships operated. It brings certainty and clarity about tax liabilities and is used by most other EEA countries. Shipping companies can opt into tonnage tax, or stay within the corporate tax regime. There is no requirement for ships entering UK tonnage tax to be registered in the UK. However, tonnage tax, together with registration reforms by the Maritime and Coastguard Agency (MCA), has been a major factor in the revival of the UK shipping register.
A key feature of the UK scheme is the minimum training obligation. This requires each shipping company to recruit and train one officer trainee each year for every 15 officer posts in its fleet, and to give consideration to employment and training opportunities for ratings. Trainees must be UK or EEA nationals and be ordinarily resident in the UK. In certain circumstances, companies can make payments in lieu of providing actual training.
Seafarers
A seafarer is a person employed or engaged in any capacity on board a seagoing ship on the business of the ship. This is taken to mean a person employed either directly by a shipping company or through a manning agency, whose usual place of work is on board a seagoing ship, and includes masters, crew members, resident entertainers and franchise employees on passenger ships.
Within the European Maritime State Aid Guidelines, the government provides support to the industry, with the aim of maintaining and increasing the seafaring skills base. The government meets almost half of the training costs through the Support for Maritime Training scheme (SMarT), and requires companies who enter into the Tonnage Tax regime to train a certain number of officer trainees. The government also supports the industry through the Seafarer Earnings Deduction tax relief scheme for certain seafarers.
Support for maritime training
The SMarT scheme was set up in 1998, following the White Paper ‘British Shipping: Charting a new course’. SMarT gives financial help to organisations providing merchant navy training, to help make sure there is adequate expertise for the sector to continue to be viable.
We reviewed the SMarT scheme as part of the government’s spending review. Following interim measures introduced for the year 2011-12, in January 2012 the Shipping Minister announced his decision to provide a budget of £12 million a year for the support for maritime training scheme for the remainder of this Parliament.
- Written statement by the Parliamentary Under-Secretary of State for Transport, 23 January 2012
- Independent review of the economic requirement for trained seafarers in the UK
- Report of the independent panel review on maritime training
In view of the forecast national shortage of trained seafarers and the need to develop the next generation of UK ratings, the majority of the SMarT budget will be used to support initial training for cadets studying at junior officer level. The rest will be used for ratings training and ratings to officer conversion training.
Information for seafarers
The Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 came into force on 1 August 2011. These regulations apply in England, Wales and Scotland. The relevant provision in Northern Ireland is the Race Relations Order 1997 (Amendment) Order (Northern Ireland) 2012, which came into force on 9 July 2012.
The regulations are designed to protect seafarers from discrimination, harassment and victimisation in the same way as other laws protect individuals working in other sectors. The regulations also clarify how equality legislation applies to work on ships and hovercraft and to seafarers.
Ports sector
The UK ports sector is the second largest in Europe, in terms of tonnage handled. It comprises a variety of company, trust and municipal ports, all operating on commercial principles, independently of government, and very largely without public subsidy. The private sector operates 15 of the largest 20 ports by tonnage and around two-thirds of the UK ports traffic. The top 15 ports handle almost 80% of the UK’s total traffic.
Until March 2010, The Department for Transport was responsible for all Harbour Revision Orders (HROs) and Harbour Empowerment Orders (HEOs). This is now the responsibility of the Marine Management Organisation (MMO)